CEO Whitman: PCs to stay, but fewer products in HP's future

Jeff Bertolucci |
June 8, 2012

Hewlett-Packard has gone through a rough spell lately, what with weak PC sales, declining profits, an embarrassing CEO scandal involving sex harassment claims and dubious expense reports, and another CEO (Leo Apotheker) getting the boot after less than a year on the job.

In September 2011, then-HP director and former eBay CEO Meg Whitman took over as HP chief. She has the unenviable task of trying to steer this bloated behemoth back to profitability.

In a interview Tuesday with AllThingsD's Arik Hesseldahl, Whitman outlined her plans to get HP back on track. Hesseldahl's lengthy Q&A covers a lot of ground, and I encourage you to read it if you want the nitty-gritty on HP's rebound strategy. I've summarized a few key points below.

The PC Business Stays

During Apotheker's brief tenure, HP flirted with the idea of spinning off its PC business and focusing on delivering software and services to its higher-margin enterprise customers. The controversial plan fizzled, however, and Whitman says HP will keep its huge--if not hugely profitable--PC business.

"As I see it, everything stays. Each of the pieces fit together. They are very big and significant businesses in their own right. The PC business is at $40 billion and number one in the world," she said.

Fewer Products

A streamlined HP will reduce the number of products it sells. "I think you will see a smaller number of products tailored to specific market segments where we can get real supply chain leverage, real inventory leverage, and real parts leverage," said Whitman. "You forget about all the spare parts we have to carry on the inventory. I think this is a big part about how we deliver better quality at lower cost and deliver real benefits to customers."

Layoffs Are Enough--for Now

HP last month announced plans to eliminate between 8 to 10 percent of its global workforce, which means cutting at least 25,000 jobs. Should Whitman slash even deeper, cut more jobs? No, she says: "I think it's about the right size. You never know for sure, but we're taking the very best analysis that we can... And it's never easy to reduce the workforce by 27,000 because it disrupts people's lives. But in my view, we couldn't afford to wait to make the needed investments to set HP up for the next five years."

HP Needs a Marketing Makeover

HP, Whitman says, "hasn't been very good at telling its own story." So should we expect bold, new marketing campaigns targeted at consumer and business customers alike?

White House: Not Interested

After her failed California gubernatorial run in 2010, Whitman has had enough of politics for now. And if fellow Republican Mitt Romney wins the U.S. presidential election in November and asks her to join his cabinet, she won't go.